The Domestic Renewable Heat Incentive to be extended

The UK Government published it’s 2020 Budget on Wednesday 11th March with the Chancellor Rishi Sunak providing a boost to renewable technologies with the extension of The Domestic Renewable Heat Incentive. In addition, funding has been allocated to support the design and delivery of net-zero policies and programmes.

Key Announcements

The Budget saw some key announcements, including:Pellet Calculator

  • £1bn on green transport.
  • An £800m fund to develop at least two carbon capture projects.
  • A £270m green heat network fund.
  • A £100m grant for homes to adopt low-carbon heating.
  • A rising levy on gas use through the Green Gas Levy and the Climate Change Levy.
  • A freeze on fuel duty, and scrapping tax relief on red diesel by 2022.
  • A £200-a-tonne tax on plastic packaging with less than 30% recycled content for companies that use more than 10 tonnes a year.

In his first budget, the Chancellor announced that it will extend the Renewable Heat Incentive (RHI) for an extra year, until 31 March 2022.The government will also introduce a new allocation of flexible tariff guarantees to the Non-Domestic RHI in Great Britain in March 2021, helping to “provide investment certainty for the larger and more cost-effective renewable heat projects,”

A new low carbon heat support scheme

Also included in the budget was mention of consultation on introducing a new low carbon heat support scheme from April 2022, a possible scheme to follow on from the RHI. This will help households and small businesses invest in biomass boilers and heat pumps. This is backed by £100 million of new Exchequer funding.

The government will invest a further £270m in a new green heat networks scheme, enabling new and existing heat networks to be low carbon and connect to waste heat that would otherwise be released into the atmosphere.

Funding for trees

Sixty million trees will be planted over the next five years to capture climate-heating carbon and boost wildlife, the chancellor Rishi Sunak has said. This will include planting 40 million trees and restore 35,000 hectares of peatland in England. Industry awaits further details on the implementation of any plans.

Levy on gas suppliers

Additionally, government aims to introduce a levy on gas suppliers to support green gas injection to the grid. This will accelerate the decarbonisation of the UK’s gas supply by increasing the proportion of biomethane in the grid, with an implementation date in late 2021. Peatland restoration and tree planting are funded by a new £640m Nature for Climate fund. “This government intends to be the first in history to leave our natural environment in a better state than we found it,” said the chancellor.

Woodsure Chairman Bruce Allen commenting on the announcement:

“It is pleasing to see the government is extending support for the Renewable Heat Incentive and looking at additional funding to enable homeowners to heat their homes with low-carbon alternatives. Woodsure has long supports the uptake of biomass heating and additional funding from 2022 is a positive step for those choosing biomass heating.”


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